WND EXCLUSIVE

U.S. dollars flow to fund jihad

Michael Carl is a veteran journalist who served overseas in the U.S. Army. He has operated his own political consulting firm and worked as a press secretary for a vice presidential candidate. He also has two master's degrees, is a bi-vocational priest and lives with his family in the Northeast United States.

Some of Africa’s most notorious jihad groups, such as Boko Haram and al-Shabaab, are benefiting from an elaborate, international funding network, including large sums of money flowing from the United States.

MoneyJihad.com founder, Terror Finance Blog analyst and writer A. D. Kendall says Somalis residing in the United States, for example, are a major source of al-Shabaab’s financing.

“First and foremost, the Somalis contribute through remittances and hawala. Somalis wire money home, which is often processed by Dahabshiil, a business that routinely pays off al-Shabaab,” Kendall told WND. “Dahabshiil’s involvement in financing terrorism is the reason why Barclays attempted to end its business relationship with Dahabshiil.”

Kendall adds that American Somalis also support jihad through direct fundraising.

“There’s international zakat for the mujahideen,” Kendall said. “Somali activists like Amina Farah Ali in Minnesota or Basaaly Moalin in California raise money from their communities for jihad and send it to al-Shabaab.”

Moalin was also sentenced to 18 years in prison for “providing material support to al-Shabaab.”

Kendall further points to Somali media that openly report direct contributions from American Somalis to al-Shabaab.

“Western readers should be aware of separate, independent reports by the Somali diaspora news media that Dahabshiil finances terrorism. According to reports by Waagacusub, Kalshaale and Suna Times, Dahabshiil pays one-half million dollars twice a year to al-Shabaab,” Kendall said.

“Sometimes these fundraisers expressly mention jihad to donors, sometimes they don’t, and often they don’t have to mention it, because it’s commonly understood that the purposes aren’t truly charitable,” Kendall said.

Dave Gaubatz, a former Air Force intelligence officer, Family Security Matters contributing editor and co-author of “Muslim Mafia”, says a large amount of the money flowing to Africa’s jihadist groups originates in the U.S., some from legally incorporated businesses.

“There are many companies operated by people supportive of the jihad groups,” Gaubatz told WND. “One is the gas station and convenience store. The real money, however, does not come from sales at their store. They buy truck loads of tobacco products from Virginia, North Carolina, South Carolina and Tennessee. The taxes on tobacco are so low in these states. They then transport (and sell the cigarettes) in states with very high taxes on tobacco, like Michigan and New York.

“The money is clean because they own a legitimate store,” he continued. “The profits in turn go to jihad-supporting groups to distribute and also directly to jihad groups operating in America.”

When asked if some of the money raised through these operations goes to Boko Haram, al-Shabaab or other groups operating in sub-Saharan Africa, Gaubatz answered, “Yes it does.”

Kendall confirms Gaubatz’s allegation of cigarette re-sales: “Hezbollah launders money through West Africa. It’s not just drug money from Latin America, but from fraudulent activities in North America, such as used car dealer schemes and cigarette-smuggling rings.”

Both men’s comments are confirmed by the story of Bassam Kiriaki, a Pawtucket, Rhode Island, accountant who pleaded guilty this year of bringing $1.2 million of cigarettes to Rhode Island from Virginia.

“Kiriaki admitted to the court that he made false representations to law enforcement and created a false tax document in order to conceal the conspiracy,” The Providence Journal reported. “According to court records, on March 30 the Virginia State Police stopped an alleged co-conspirator and seized $30,000 from his vehicle.

“After the stop and seizure, the FBI intercepted calls made by Kiriaki during which he agreed to call Virginia State Police and to tell them that the money was to buy merchandise for a new store in Virginia, Bad Boys Tobacco Stop, Inc.,” the Journal report said.

Kiriaki’s conviction is the latest in a series of arrests for illegal cigarette trafficking.

Yahoo News reported in March of this year 56 percent of the cigarettes sold in New York City were brought illegally from out of state sources.

It’s reported that 15 Palestinians and a South Carolina imam were arrested for participating in the New York City cigarette-smuggling operation. In one case, the Palestinian ringleader was also charged with a plot to kill the witnesses in one of the operations.

Kendall adds that other Islamic groups filter their funding through both North and sub-Saharan Africa.

“As far as North Africa is concerned, Libya has been a destination for U.S.-Islamic charities to do work in, and I suspect money from Islamic Relief USA or the Zakat Foundation has wound up in the hands of groups like that. Islamic Relief, USA and Zakat Foundation have a tendency to partner with local groups to administer projects on the ground without scrutinizing how militant they are,” Kendall said.

Kendall adds that Eritrea exploits consular services to fund jihad: “Eritreans living throughout the world, including the U.S. and Canada, are often forced to pay a diaspora tax, collected by Eritrean embassies and consulates (which is a violation of international consular law). This money is used to fund Eritrea’s despotic regime, which uses the proceeds partly to buy weapons and to fund jihadist groups against its neighboring African enemies.”

Consultancy Africa Intelligence analyst Maha Hamdan confirms that American Muslims contribute literally thousands of dollars to jihadist groups operating in Africa. She says that after American Muslims donate the money, the cash filters through a labyrinth of organizations.

“African terrorist organizations may raise funds through abuse of charitable entities or legitimate businesses and self-financing, criminal activity, state sponsors and activities in failed states and other safe havens,” Hamdan told WND. “These sources of terrorist financing can be divided into two general types: There are those that operate top-down, in which large-scale financial support is aggregated centrally by states, companies, charities or permissive financial institutions.

“Then there are those that operate bottom-up, in which terrorist fundraising is small-scale and dispersed, for example, based on self-financing by the terrorists themselves using employment or welfare payments. A single terrorist organization may use a number of different financing methods,” Hamdan said.

Hamdan says a Boko Haram member openly boasted the group gets money from illicit business operations.

“In September 2012, a confirmed member of Boko Haram revealed during interrogations that one of the ways through which Boko Haram funds its activities is by purchasing and sending items to its members in other locations. These items are sold at inflated prices, and the proceeds are used to finance the activities of the terrorist organization, including renting apartments and procuring improvised explosive devices, [or I.E.D.s] for their operations,” Hamdan said.

Hamdan says terrorism financing has developed into a variety of sophisticated operational layers.

“Terrorist organizations vary widely, ranging from large, state-like organizations to small, decentralized and self-directed networks. Terrorists have shown adaptability and opportunism in meeting their funding requirements,” Hamdan told WND. “The nature of funding for both operational and broader support activities varies by the type of terrorist organization, with traditional, hierarchical quasi state-like terrorist organizations on one side of the spectrum and small, decentralized, independently supported organizations on the other.

“At its extreme, this second category has involved small, ostensibly self-directed networks seeking to meet their own funding requirements through means that differ little from their everyday activity. Purchases, even when used to procure the operational items, are not conspicuous,” Hamdan said.

Hamdan says that terrorist networks have devised sophisticated means to move money from the source to the operating terror networks.

“There are three main methods by which terrorists move money or transfer value,” Hamdan told WND. “The first is through the use of the financial system. Analyses of a number of terrorism cases has revealed that radical groups as well as persons related to terrorist organizations have used the network of the registered and world-wide operating money transfer companies to send or receive money.

“The second involves the physical movement of money (for example, through the use of cash couriers),” she continued. “The physical movement of cash is one way terrorists can move funds without encountering any financial security safeguards established in financial institutions. It has been suggested that some groups have converted cash into high-value and hard-to-locate commodities.

“Analysis of a number of terrorism cases has shown that money couriers are active even within Europe and between countries with a well-functioning financial system. In most cases couriers are involved in moving funds generated outside the financial system and kept out of the financial system to avoid detection,” Hamdan said.

“The third method is through the international trade system, or the use of alternative remittance systems,” she explained. “Alternative remittance systems are used by terrorist organizations for convenience and access. ARS have the additional attraction of weaker and/or less opaque record keeping and in many locations may be subject to generally less stringent regulatory oversight.

“Often, terrorist organizations abuse alternative remittance systems, charities or other captive entities to disguise their use of these three methods to transfer value,” Hamdan said.

She adds that no terrorist group, from Boko Haram to al-Shabaab, consistently uses just one money-moving system.

“Terrorist organizations use all three methods to maintain ongoing operation of the terrorist organization and undertake specific terrorist activities,” Hamdan said. “The multiplicity of organizational structures employed by terror networks, the continuing evolution of techniques in response to international measures and the opportunistic nature of terror financing all make it difficult to identify a favored or most common method of transmission.

“Regular funding to maintain a group’s capacity is best facilitated via the conventional banking system – as money sent from one country to another can be disguised behind false name accounts, charities or businesses to disguise the ultimate recipient; but other ways to move money are used for specific purposes, or to disguise terrorist financial trails,” Hamdan said.

In a recent story on Boko Haram and al-Shabaab’s networking strategies, WND reported on an alleged al-Shabaab money-laundering operation.

In one case, a Canadian citizen of Somali origin residing in Dakar, Senegal, established a real estate company in conjunction with a Senegalese national. An account was opened for the company at a bank in Senegal. Shortly afterward, this account received a wire transfer of approximately $106,000 from a Somali national living in the United States. A financial institution based in Dubai executed the transfer.

Hamdan explained, based on the suspicious circumstances of the transaction – including the country of origin of the funds, lack of adequate information documenting the identity of the new customer and the destination of the funds – the Senegalese bank filed a report with the Senegalese government.

“During the subsequent FIU investigation, it was revealed that the company had no legal status in Senegal and was established specifically for laundering illicit funds through the sale of imported goods. All three parties were found to be in contact with extremist groups involved in terrorist activities in East Africa, North America, Europe and in Mauritania,” she said.

“The three established a related company together with other Senegalese nationals to import used goods. Some of the goods were sold locally and the remainder exported to a third country for re-sale. The proceeds of these sales were sent to a number of terrorist groups,” Hamdan said.

“The bottom line,” she added, “is that trading tactics will involve better networking that will help them raise more funds.”

WND also reported in September 2011 that Shia mosques in the United States were allegedly involved in raising money for Hezbollah. The allegations come from Sam Bazzi, director of the Islamic Counterterrorism Institute.

He reported he’s been in mosques and has seen how the fundraising works.

“They are contributing to Hezbollah indirectly because every Shi’a Muslim has to pay a 20 percent yearly tax on their savings. This goes basically to the clerics as a donation,” he said. “Hezbollah supporters in the U.S. mosques send money to their bank accounts in Lebanon. When they go to Lebanon for vacation in the summer, they go to the clerics in the mosques in Lebanon and pay the Khums (offering) to the mosque in Lebanon. When they do that, they’re giving it to Hezbollah.”